The Changing Face of America Requires More Diversity in Executive Leadership

African Americans, Asian Pacific Islanders, and Hispanics made up over a third of the US population in 2010 and the numbers continue to rise. The population of two of those groups, Asian Pacific Islanders and Hispanics, are growing at approximately 8 times the rate of the white population. And one of those groups, the majority minority Hispanics, will represent 30% of the U.S. population alone by 2050. And with this population growth comes increased economic impact. Indeed, Hispanic purchasing power will be an estimated $1.2 trillion as early as 2012.

In short, we are becoming an increasingly diverse nation at a faster and faster rate. But American business leaders – and Americans in general – remain in denial about the implications of these facts. A recent Pew Hispanic Center study found that 74% of those surveyed could not name an important Hispanic leader in the U.S. At the leadership level itself, the Census Bureau reports that white men overwhelmingly dominate boards of Fortune 500 companies, holding more than three quarters of all seats. Women hold 15.7 percent of board seats and minorities hold 9.8 percent of board seats. And Fortune 500 boards are less diverse than Fortune 100 boards. Approximately one-half of Fortune 500 company boards have 20 percent or less representation of women and minorities. Minorities and women are underrepresented at the leadership level, and as a result, Americans are not aware of the few leaders that have reached high levels in business. And without such representation, how will companies develop an authentic awareness of the new consumer markets?

But the myopia does not stop there. Companies, deprived of a diversity of leadership, lack the imagination and innovation to market to these fast-growing populations, and are falling further and further behind the global competition. A recent 2011 study by Forbes Insights, “Fostering Innovation through a Diverse Workforce,” found that,

Respondents in Asia were more likely to see a link between diversity and innovation. In the APAC region, 56% “strongly agreed” with this notion, compared to 48% in the Americas and 41% in EMEA. “In Asia Pacific, we’re focused on leveraging diverse skills in growth markets and getting better gender representation in senior management,” explained Niki Kesglou, head of diversity and inclusion, Asia Pacific, for financial services firm Credit Suisse.

The study notes further that,

The basic formula for diversity is rapidly evolving. It is no longer simply a matter of creating a heterogeneous workforce, but using that workforce to create the innovative products, services, and business practices that can set a company apart and give it a competitive advantage in the marketplace. And as companies compete on a global scale, diversity and inclusion frequently have to shift, as different markets and different cultures have varied definitions of what diversity means. Today, diversity and inclusion efforts are de rigueur for almost all companies.

America’s corporations must accept the realization that diversity in executive leadership positions is no longer optional. It is strategic and operational necessity for any organization that wants to grow and innovate in the marketplaces of the future.

Important Note: The following video is just one example that clearly defines the business case for diversity in America's corporations.

My goal is to prepare organizations for Leadership in the Age of Personalization℠– to help companies and their leaders evolve and stay ahead of the rapid changes in the workplace and marketplace - as the individual defines the business. I am a former C-suite corporate execut...